Technical analysis and stock market dynamics guide the investment approach of Bedford & Associates Research Group. “We feel that the price action of the stock in question takes precedence over fundamental factors such as profit margins and sales growth,” says president Terry Bedford. While traditional metrics offer insight into a stock’s performance, his firm also looks for stocks that attract significant “sponsorship,” or interest from other institutional investors. “This sponsorship manifests in strong price action for the stock,” says Bedford.
The Hamilton, Ontario-based firm oversees $110 million in assets, and Bedford says that (beyond a movement in share price) there are a few key factors that guide him when he’s looking for a winning stock. To start, he looks for companies that have unique products that drive market share and any investment trends that may attract investors to that stock.
BEDFORD’S STOCK PICKS
Micron Technology Inc.(NYSE: MU)
12- to 18-month target:$27.00
P/E on projected 2007 earnings:18.8
Est. 5-year annual EPS growth rate:17%
Why stock will outperform: The semiconductor manufacturer will benefit from an increase in demand for NAND flash memory used in cell phones, digital cameras, and iPods.
Genentech Inc. (NYSE: DNA)
12- to 18-month target:$120.00
P/E on projected 2007 earnings:40.7
Est. 5-year annual EPS growth rate: 28.8%
Why stock will outperform:Genentech has a unique market position and is developing drugs and treatments for patients fighting cancer, heart disease, and other illnesses.
Freeport-McMoran Copper & Gold Inc.(NYSE: FCX)
12- to 18-month target:$90.00
P/E on projected 2007 earnings:7.8
Est. 5-year annual EPS growth rate: 0%
Why stock will outperform:The company continues to benefit from copper production and prices should remain relatively high as China’s economy continues to grow.
Getty Images Inc.(NYSE: GYI)
12- to 18-month target:$65.00
P/E on projected 2007 earnings:19.7
Est. 5-year annual EPS growth rate: 17%
Why stock will outperform:Business is projected to recover from arevenue slump, and Getty is poised to generate income growth from its imaging work for film and broadcasting.
Cameco Corp.(NYSE: CCJ)
12- to 18-month target:$54.00
P/E on projected 2007 earnings:26.22
Est. 5-year annual EPS growth rate: N/A
Why stock will outperform:The company has dominant market share and should increase its revenues by providing uranium to a growing number of nuclear power facilities.
Source: terry bradford, Yahoo! Finance.
price As of close on jan. 5, 2007. bedford does not maintain a position in any of the recommended stocks.